Notice of Proposed Rulemaking on Revisions to the Community Bank Leverage Ratio (CBLR) Framework

Summary:

The Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System (Federal Reserve), and Federal Deposit Insurance Corporation (collectively, “agencies”) are inviting public comment on a notice of proposed rulemaking (proposal) that would modify the community bank leverage ratio (CBLR) framework, consistent with section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, to encourage broader adoption and provide greater regulatory burden relief for community banks.

Statement of Applicability: Other (The contents of, and materials referenced in, this FIL apply to FDIC-supervised financial institutions with less than $10 billion in total consolidated assets that are not advanced approaches banks.) 

Highlights:

Specifically, the proposal would: 

• Lower the CBLR requirement from 9 percent to 8 percent, which would allow more community banks to qualify for the CBLR.
• Extend the grace period from two quarters to four quarters, in order to provide additional time for community banks to either satisfy the definition of a qualifying community banking organization under the CBLR framework, or to achieve compliance with risk-based capital requirements.
• Limit a community bank to using the grace period for a maximum of eight out of the prior twenty quarters.

Comments on the proposed rule are due 60 days after the date of publication in the Federal Register.